Datalex Analyst Presentation

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The Secrets of Media Convergence
How can you manage travel information across
multiple channels? What's the future of
convergence and how can you make sure you don't
miss out?
Richard S. Kunz Senior VP, Global
Marketing Datalex
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Datalex is a Prime Enabler in the Evolution of
the Global Travel Industry
B2C
Leisure Travel
Travel Suppliers
Server Running Datalex E-Commerce Applications
B2C
Wholesalers GDSs
Web Portals, BM Agencies Corporate Intranet
B2B
B2B
B2B
B2C
Server Running Datalex Middleware
Server Running Datalex Middleware and E-Commerce
Applications
E-Travel Company Server Running
Datalex E-Commerce Applications
DATALEX products intervene several times on a
single travel transaction
Business Travel
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Datalexs Products Target All Major Players in
the Global Travel Industry
Travel Suppliers
Travel Intermediaries
Datalex Product Offering
BookIt! Product Suite BookSmart ARIVA Market
Profile ARIVA Account Profile Message
Middleware Universal Gateway XML Gateways
GDSs
Travel Retailers
BookIt! Product Suite Message Middleware Universal
Gateway XML Gateways
BookIt! Consumer BookIt! Fares Host Access
Server BookIt! Tour BookIt! PRO BookSmart
TPF Consulting
Datalex Service Offering
ASP Services
Internet Technologies Consulting
E-Business Consulting
Product Support and Consulting
Customisation Services
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Datalexs Customers Span the Global Travel
Industry
Suppliers
Intermediaries
Air Car Hire Hotel Rail Ferry Tour
Cruise Travel Suppliers
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The Global Travel Industry is HUGE and Highly
Fragmented
Suppliers
Intermediaries

• Suppliers include airlines, hotels, rail
  companies, cruise lines, hotels and car rental
  companies
• Airlines own key inventory. American, United and
  Delta built the technology systems of the travel
  industry using IBM mainframes and dedicated
  connections
• In 1999 airlines invested an average of 2.5 of
  their turnover in IT, SITA, IT Services
• IATA estimates its members combined operating
  revenues in 1998 were 274 billion

• Intermediaries include GDSs, travel agents,
  e-travel companies and corporate travel
  departments
• The aggregators wield power. The airlines created
  GDSs to let travel agents book seats
• A multitude of travel agencies, including large
  groupings, franchises and tens of thousands of
  small independents own the customer relationship
• Airlines, aggregators and travel agencies have
  been interconnected since the seventies on
  expensive dedicated networks

Complex supply chain with multiple intermediaries
between the suppliers and consumers
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Convergence of Technology and Communications are
Key in the Global Travel Industry for the past
40 years
1960s 1980s
1995 Present
2000 Onwards
DesktopPC
Mobile Phone
TravelAgents
Internet/ Intranets
Internet
GDS
Travel Agent
Server
Car Mainframe
Airline Mainframe
Web-Native Multi-Channel Distribution
Moving to the Internet

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Convergence of Technology, Content, CRM and
Aggregation
Suppliers
Retailers
Build deep customerprofiles that are shared
with suppliers to anticipate demand
Open inventory systemsin exchange for
betterdemand data
Airline
Car
Hotel
Aggregators
E-Business Infrastructure Providers
Assemble informationand services in newways to
serve mobileusers and travelcompanies
Offer aggregatedanalysis to all playersas a new
revenuesource
Source Forrester Research, Inc.
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e-Business Landscape Capital Convergence

• Whose got the money to survive?
• Valuations are returning to the fundamentals
• Equity markets weakness will likely create some
  chaos
• Bankruptcies and consolidation inevitable
• The well capitalised firms will get stronger
• Priceline, LastMinute, Travelocity, Expedia

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e-Business dynamics allow anyone to be a seller
or buyer
Wholesalers
Consolidators
Agency Chains
Travel Agents
Corporations
Seller or Buyer
Leisure Passengers
Frequent Fliers
Cruise Companies
Hotels
Tour Operators
Car Rental Companies
Railways
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Channel Distribution Strategies

• e-Business commoditisation
• You must plan a multi-channel strategy
• Its not just the Internet!!
• Its not just B2B or B2C

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Supplier Issues in a Virtual World

• Commodisation
• Pricing Transparency
• May impact yield management principles

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Retailer Issues in a Virtual World

• What is the revenue model?
• Commissions no longer exist
• Define your value proposition
• Is there more than just price?
• Maintain as much independence/leverage as
  possible
• With suppliers
• GDSs

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Distribution Cost Theory

• The Internet will reduce my distribution costs
  since I can eliminate the middleman.

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Distribution Cost Theory

• Facts
• The Internet has complicated the channel
  strategies for suppliers.
• Has this made distribution costs cheaper or more
  expensive?
• Commissions may be disappearing but what has it
  done the other expenses, which are needed to
  support these multiple channels?